The militants entered Monguno in Borno state posing as a convoy of soldiers on Tuesday evening, the sources said. They then attacked troops inside the town, destroying at least 750 homes in the process.

Resident Gumati Sadu said people fled into the bush for safety during the fighting and that three civilians were killed by stray bullets.

A military spokesman declined to comment.

Islamic State West Africa Province (Iswap) claimed responsibility for the attack on its Amaq news agency.

It said that one of its militants detonated a car bomb in the town, killing at least 8 soldiers and destroying 3 armoured vehicles.

The group also said it had seized a vehicle, weapons and ammunition before leaving the town.

Iswap split from Islamist group Boko Haram in 2016 and has since staged its own frequent attacks in the region.

Boko Haram’s decade-long insurgency campaign has killed thousands and displaced millions in northeastern Nigeria.

Thousands in Monguno had already been displaced from their homes elsewhere in Borno state by militants. Aid group Medecins Sans Frontieres warned last year that many thousands in Monguno lacked proper shelter, water, sanitation and food.